Exam 5: Elasticity and Its Application

When the price of candy bars is $1.00, the quantity demanded is 500 per day. When the price falls to $0.80, the quantity demanded increases to 600. Given this information and using the midpoint method, we know that the demand for candy bars is

If the price of milk rises, when is the price elasticity of demand likely to be the lowest?

Figure 5-17 -Refer to Figure 5-17. If, holding the supply curve fixed, there were an increase in demand that caused the equilibrium price to increase from $6 to $7, then sellers' total revenue would

Cross-price elasticity is used to determine whether goods are inferior or normal goods.

Which of the following statements is valid when the market supply curve is vertical?

Holding all other forces constant, if increasing the price of a good leads to an increase in total revenue, then the demand for the good must be

Price elasticity of demand along a linear, downward-sloping demand curve decreases as price falls.

When demand is inelastic, an increase in price will cause

Figure 5-4 -Refer to Figure 5-4. The section of the demand curve from B to C represents the

Figure 5-8 -Refer to Figure 5-8. An increase in price from $10 to $15 would

At price of $1.25, a paper manufacturer is willing to supply 150 spiral notebooks per day. At a price of $1.50, the paper manufacturer is willing to supply 175 spiral notebooks per day. Using the midpoint method, the price elasticity of supply is about

Figure 5-3 -Refer to Figure 5-3. The demand curve representing the demand for a luxury good with several close substitutes is

If the price elasticity of supply is 1.5, and a price increase led to a 1.8% increase in quantity supplied, then the price increase is about

While in college, John and Bethany each buy five packages of mac-n-cheese per week. After they graduate and have full-time jobs, John buys six packages per week, but Bethany buys only two packages per week. When looking at income elasticity of demand for mac­n­cheese, John's

Scenario 5-5 Milk has an inelastic demand, and beef has an elastic demand. Suppose that a mysterious increase in bovine infertility decreases both the population of dairy cows and the population of beef cattle by 50 percent. -Refer to Scenario 5-5. Total consumer spending on milk will

Which of the following statements is not correct concerning government attempts to reduce the flow of illegal drugs into the country? Drug interdiction

If the quantity supplied is the same regardless of price, then supply is

The supply of a good will be more elastic, the

The case of perfectly elastic demand is illustrated by a demand curve that is

A manufacturer produces 400 units when the market price is $10 per unit and produces 600 units when the market price is $12 per unit. Using the midpoint method, for this range of prices, the price elasticity of supply is about